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For many months now, the western media has presented the Israeli-Palestinian conflict in terms of a new and deepening rift. Israel is supposedly positioned on one side of the divide and the US and Europeans on the other, trying as best they can to defend Palestinian rights.

In the past few days alone, European diplomats have leaked a report harshly criticising Israeli policy in Jerusalem, while US officials have accused Israel of waging a black ops campaign to sabotage its nuclear talks with Iran.

Both the Europeans and US president Barack Obama are reported to be furious that Netanyahu divulged during this month's election campaign what everyone already knew: that he had no intention of allowing the Palestinians to establish a state.

In a now-typical report, Newsweek quoted a former US intelligence official last week describing the current mood in the White House: "I can assure you that behind closed doors the gloves are coming off. Bibi [Netanyahu] is in the administration's crosshairs."

But how plausible is this scenario?

Certainly, Israel's prime minister Binyamin Netanyahu has found himself in a mounting conflict with the White House. No president likes to be ritually humiliated by the leader of a vassal state. Obama genuinely wanted to see the back of Netanyahu in the elections.

But the very public disagreements between the two are not, as is generally assumed, focused on outcomes: ending the occupation or offering a just solution to the Palestinians. Rather, the feud is itself part of a drama designed to divert our attention from the substantive issues.

The tensions are kind of a theatre of distraction, necessary for the US and Europe to maintain their image as actors desperately trying to corral Israel into doing the right thing by the Palestinians.

In fact, the dispute between Netanyahu and Obama is not really about the Palestinians at all; it is about Netanyahu's failure to play his part in the sham peace process the US has presided over for the past two decades. But the deception runs deeper still.Unsatisfactory Plan B

Denied, by virtue of Netanyahu's intransigence, the endless negotiations that so successfully sustained the illusion of a temporary occupation, the White House has had to fall back on a very unsatisfactory Plan B. That involves the US and Europe acting the role of the aggrieved party, publicising at every turn their anger that Israel has refused to cooperate in ending the Israeli-Palestinian conflict.

With the US denied futile peace talks to justify continuing inaction, it has had to exploit a drama of behind-the-scenes conflict to suggest it is doing everything diplomatically possible to make Israel see sense. In that way, Washington's hands stay clean.

If that seems overly cynical, remember that, if the US really wanted to end the occupation, it could make it happen in short order. It could simply pull the plug on its financial, military and diplomatic support, stand back and watch Israel flounder.

Even were the US Congress initially to oppose the US president's efforts to force Israel to be more cooperative, the White House could quickly reshape the domestic discourse about Israel and the occupation.

If the US really wanted to end the occupation, it could make it happen in short order.

It would simply need to start talking, as it did very briefly when Obama entered office, about how Israel poses a threat to US interests in the Middle East, endangering Americans' lives in the region and inflaming a global terrorism that will rebound on the US at home.

Sustained criticism of this nature - not only from Obama but from the Pentagon too - would quickly erode political support for Israel's occupation, even in Congress.

Instead, all the parties - Washington, the EU, Israel, even the Palestinian Authority - have conspired, willingly or otherwise, in a dishonest performance.

Drama of conflict

The deceptions about the occupation are so multi-layered that it would be a mistake even to believe what Netanyahu himself claims. He too is engaged in creating a drama of conflict – more apparent than real – to divert his own public from a proper understanding of the collaborative relationship between Israel and the PA.

Last week, shortly after winning the election, Netanyahu reversed his policy of withholding tax revenues from the PA. He had stopped the transfers four months earlier to punish Mahmoud Abbas for joining the International Criminal Court in the Hague, the first step in prosecuting Israelis for war crimes.

At the time Netanyahu indicated that the PA would not receive the revenues, which Israel collects on the Palestinians' behalf, so long as it continued with its application to the ICC.

Deprived of some $125m a month, the PA's eventual collapse was inevitable. That would have left Israel taking on the huge financial and military burden of directly controlling the urban areas of the West Bank.

The PA refused to back down over its ICC membership but Netanyahu nonetheless changed course last week, saying he was doing so for "humanitarian reasons": to alleviate the suffering of the Palestinian people.

But the reality is that he had no choice: his own generals have warned him many times of the terrible consequences for Israel of destroying the PA. Netanyahu was playing the tough guy for the sake of his voters, but knew from the outset that he would have to capitulate. A gullible Israeli public was being deceived all along.

Europe's empty threats

But no less credulous are many in the west, including journalists and analysts.

Immediately after Netanyahu's election victory, European diplomats leaked a supposedly "hard-hitting" confidential report to the Guardian newspaper. The document was highly critical of Israeli policy in Jerusalem, probably the most contentious of the issues that will one day have to be agreed with the Palestinians.

Israel was blamed for expanding settlements, abusing the rights of the Palestinian population there, and undermining a two-state solution, which will require Jerusalem's division.

The diplomats also recommended that the EU punish Israel as a way to increase pressure on Netanyahu to accommodate Palestinian demands.

But the leaking of the report was just as much dissembling drama as Netanyahu's show of intransigence on the PA's tax revenues. It was intended both to demonstrate how angry the EU was with Israel and suggest that the Europeans were making Netanyahu pay a price.

But the make-believe nature of European "action" was apparent as soon as one looked behind the headlines. The threats against Israel were empty, both because they are unlikely to be carried out and because, even if they were, they would inflict almost no damage on Israel.

For example, the diplomats suggested that the EU should consider placing restrictions on the entry to Europe of known Jewish extremists, those behind violent attacks on mosques and Palestinian villages in the West Bank.

In practice, this would target a small group of ideological settlers, maybe numbering a few dozen, while ignoring the systematic violence against Palestinians inflicted by the Israeli army and the occupation's bureaucrats. It would be like trying to make a beach resort safe for swimmers by catching a few crabs and leaving a great white shark to patrol the waters.

It would be like trying to make a beach safe by catching a few crabs and leaving a great white shark to patrol the waters.

The report also argued for providing European shoppers with more information on products exported from the illegal West Bank settlements. Note that the diplomats were suggesting only improved labelling, not banning the products. In fact, a ban on goods made by Jewish settlers on land stolen from Palestinians should be entirely non-controversial, but it is not even on Europe's agenda.

Further, the export of settler goods is a tiny fraction of Europe's trade with Israel, which is governed by a special agreement that has made the EU Israel's largest export market. Even were Europe to consider banning settler products, it would make no impact on the Israeli economy.

What would hurt Israel - and force it to rethink its policy towards the Palestinians - would be threatening to revise or tear up the trade agreement. That could decimate Israeli exports. But such a prospect is so far off, no Israeli politician seriously entertains the possibility.

Israel accused of spying

The US administration has been equally duplicitous in its dealings with Israel, as recent events have illustrated.

Last week, US officials anonymously told the Wall Street Journal that Israel had spied on negotiations with Iran. Not only that, but Israel had then briefed Obama's opponents in Congress to try to sabotage the talks.

At the same time, the US president fired another shot across Netanyahu's bows, saying there was a "real knotty policy difference" between the two on Palestinian statehood.

White House officials, meanwhile, suggested that Obama is now "reassessing" the US position at the UN, and might consider refusing to protect Israel with its veto from hostile resolutions, either denouncing the settlements or affirming Palestinian statehood.

Certainly, the White House has a pressing reason to exert pressure on Israel right now. The leaks by US and European officials are designed in part to influence Netanyahu as he considers whom to include in his new governing coalition. Fearing that the White House will face another exclusively right-wing Israeli government, Obama hopes to make it clear to Netanyahu that he is expected to extend his hand to Isaac Herzog, the centrist leader of the Zionist Union.

But Herzog is no more willing than Netanyahu to alienate his supporters by working seriously for a Palestinian state, which is why he barely mentioned the Palestinians during the election campaign. He knew that to do so would be electoral suicide.

Emperor exposed as naked

By exposing the White House's policy in the Middle East as a sham, Netanyahu has pulled the rug from under the US and Europe. He has risked showing that the emperor is unclothed.

Without a cooperative Israeli partner, Obama has had to fall back on a personal feud as justification for the status quo. He will now spend months publicly berating and punishing Netanyahu while privately continuing massive aid handouts and signing exclusive arms deals with Israel.

Peter Beinart, an influential US commentator for Israel's liberal Haaretz newspaper, described Israeli-US relations as "fundamentally changed" after the Israeli elections. But he went on to point out that the White House was carefully distinguishing between political support, which he thought likely to suffer, and military-security support, which was ringfenced. "Administration officials insist that they will never cut military aid, since that would harm Israeli security," he said.

But this is the only significant leverage the White House has over Israel. If security ties are inviolable, then Obama's threats are nothing more than posturing - posturing needed for his benefit more than Netanyahu's.

Even while US officials indicate that they might not veto a UN resolution backing Palestinian statehood, they are already attaching conditions making it impossible in practice for the Palestinians to advance their cause, such as insisting that Abbas recognise Israel as a Jewish state.

Washington would prefer that these hollow threats force Netanyahu to resume his performance in the doomed peace process. But with no prospect of serious damage to Israeli interests, Netanyahu appears to be standing his ground.

If so, Obama will continue lashing out at the Israeli prime minister, buying time until a new more convincing script can be crafted – ideally with a successor to Netanyahu who proves more obliging.